​VIP parking downtown?

The Judge Doyle Square project calls for 1,250 parking spaces, including 600 that would be owned by the city and 650 that the private developer would control.

The Judge Doyle Square project calls for a hefty city investment of around $63 million.

The bulk of that money — an estimated $40 million — will pay for the construction of 1,250 parking spaces. It’s a cost the city is being asked to pay in order to bring a marquee corporate headquarters, Exact Sciences, to downtown.

Even champions of the project admit they have some concerns about giving a private company essentially free parking, which it could use to compete with the city’s own parking utility.

“There’s a lot of factors to consider: one is obvious fairness to other organizations, other developers and companies that are already downtown that don’t have the same advantage,” says Ald. Mark Clear. “It makes the whole thing really complicated.”

Others say the plan isn’t complicated at all. Ald. David Ahrens, a critic of the project, predicts catastrophe, saying the city “is financing private parking that bankrupts the parking utility.”

The city has been trying to develop Judge Doyle Square for years. The city property includes the half block behind the Municipal Building and the aging Government East parking ramp across Pinckney Street. The city wants to leverage this valuable property to spur private development, including a hotel to complement the Monona Terrace Community & Convention Center.

The city is currently negotiating with a development team that includes Bob Dunn of Hammes Company and Exact Sciences, a biotech firm that has developed a colon cancer screening test.

The team proposes a roughly $200 million project that would include 250,000 square feet for Exact Sciences’ corporate headquarters, a 210- to 250-room hotel, a bicycle center, a health club, retail and other uses.

While a city subsidy for a hotel has long been controversial, this time around, it’s the subsidy for parking that is raising eyebrows among skeptics.

The current plan calls for most of the 1,250 parking spaces to be underground. Six hundred of these would be allocated to the parking utility as a replacement for the city’s Government East ramp. Another 600 spaces are earmarked for Exact Sciences and the remaining 50 for hotel guests.

The parking utility, which is entirely self-funded by users, would contribute $17.9 million from its roughly $26 million reserves to build the public spaces. The city would also kick in another $1.3 million for spaces for its fleet vehicles.

The city would also contribute $20.8 million in tax incremental financing to pay for 650 parking spaces that would be used by Exact Sciences and the hotel — about $32,000 per space. (The developers originally wanted 850 spaces, but decreased the request by 200).

Although these spaces would be owned by the city, the developer would get to use them for a bargain. It has proposed renting the spaces for a total of $40,000 a year — the equivalent of $5 per month per space.

In contrast, the city currently rents spaces at Government East — the most expensive of its garages — for $250 a month.

According to a July 7 memo from the city’s negotiating team to the Common Council, Exact Sciences proposes to have 300 people working in the facility when it opens on July 1, 2017, and increasing that number to 400 by Jan. 1, 2019. It anticipates having 600 employees by 2023. Until then, that leaves at least an extra 200 to 300 parking spaces.

Some fear the developers would rent the spaces out, undercutting the city’s parking utility.

“What’s going on with the other 200 spaces? Given the way it’s structured, they’d be in direct competition with the city’s garages. That worries me,” says Ald. Rebecca Kemble, a member of the city’s Transit and Parking Commission. “It seems a little crazy that we would subsidize a competitor to our own utility.”

Kemble would like the utility to own and control all of the spaces, perhaps renting some of them to Exact Sciences at a discount.

Clear agrees the current proposal raises concerns and offers another alternative. “Any excess the private development doesn’t need should probably be managed by the parking utility,” he says. “That’s a complicated thing to figure out and a moving target, because nobody really knows what Exact Sciences’ growth rate will be.”

Isthmus could not reach Bob Dunn for comment. Exact Sciences did not make Kevin Conroy, its president and CEO, available for an interview. The company’s spokesperson, JP Fielder, took all questions.

Fielder declined to say what the developers would do with these extra spaces or who would control them. “We outlined the numbers of what we need,” he says. “In the midst of negotiations it wouldn’t be good to talk more specifics. The numbers we need are the numbers we need.”

The July 7 memo from the city’s negotiating team to the council notes that the developer proposes giving the city a 20% cut of whatever profits it makes from parking. It estimates that will amount to $75,000 a year — meaning its own take from parking would be $300,000 a year.

Scott Lee, assistant manager of the city’s parking utility, doesn’t like this arrangement. Even if the developer doesn’t undercut the city’s parking rates, he says, it will still take business away from the utility.

“A good portion of that money [will come] at the expense of the parking utility,” he says. “And we’ll only get 20% back.”

Lee also worries that the project will encourage more driving into an already congested area, with no incentive for employees to ride buses or bikes.

“City employees are given free bus passes, but we don’t get free parking,” he notes. “So if I choose to drive in, it’s an added cost to me. We try to encourage our employees as a city to use alternative transportation. This plan does not in my estimation put anything toward that effort. They’re supplying one stall for every employee that they have.”

Ahrens notes that the city has asked for a bicycle center, which it will fund to the tune of $1 million.

But with the city building so much parking, he asks, “Why would someone ride their bike when they can park for free in a climate-controlled parking venue?”

Lee has other concerns. He worries that no parking will be available for 18 months during construction — which will inconvenience residents and cost the utility millions in revenue.

He wonders how motorists will be able to figure out which spaces are public and which private. And he’s concerned that most of the cars will enter and exit the garage on Wilson Street, backing up traffic at rush hour.

And depleting all but about $8 million of the utility’s $26 million reserve does not give him comfort either. “We won’t be able to build our reserves up to this current level in time to pay down the next garage replacement,” Lee says. “It’ll have to involve some borrowing on behalf of the utility.”

Other concerns relate to design. Under the current plan, the first level of parking will go underneath both block 88 (behind the Municipal Building) and block 105 (where Government East is). Block 105 will include four more levels of parking below that.

But excavating that deep could put the structure into the water table, meaning the city will have to constantly pump water.

“It’s an operating cost,” Lee says. “These structures will last 70-plus years. So for the next 70 years, we’ll pay an increased operating cost for that. And it’s an unknown.”

A better design, Lee thinks, would be to have three levels of parking under both blocks, which would keep the structure above the water table. However, the developer has said because Exact Sciences needs to occupy its offices by mid-2017, it does not have time to dig deeper on Block 88.

Brad Binkowski, one of the principals of Urban Land Interests, downplays the concern about water drainage. ULI is not involved with the Judge Doyle project, but it developed Block 89 across the street from it, which includes five levels of underground parking.

Binkowski says that all parking structures have drainage systems, but the operating costs are not that high. “We have pumps, but they only run when the basins get filled,” he says. “It’s not a big deal at all.”

More broadly, Lee frets about the pressure the city is under to make a decision. The developer wants an agreement signed by Sept. 1.

“If they’re expecting a decision in six to seven weeks, are we going to have sufficient time as a city to thoroughly vet this?” asks Lee.

“They’re telling us what they’re going to build, and we’re going to own part of it and maintain it, yet we’re not involved in the discussion to design it,” he adds. “It makes me very nervous that we will have as high a functioning a facility that we can.”